Financial Crime World

Assessment Report: Brunei Darussalam’s Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Measures

Investigations and Prosecutions

  • Brunei’s ML investigations have focused primarily on self-laundering activities, with limited examples of stand-alone ML.
  • There were no cases of ML from foreign predicate offenses or ML through legal persons.

Confiscation

  • Brunei includes confiscation as an overarching policy objective in its National Strategy.
  • LEAs have shown some progress in seizing property with a view to confiscation since the establishment of the Strategy in 2017.

Cash Smuggling

  • There are concerns regarding the potential of poor detection of cash smuggling at the borders, especially in the context of Brunei’s largely cash-based economy and the potential for cross-border movement of monies.

Terrorist and Proliferation Financing (TF)

  • Brunei authorities place a high priority on combating terrorism and TF, with significant well-coordinated resources to identify and mitigate TF threats.
  • There are no TF investigations, prosecutions, or convictions in Brunei to date.

Institutional Structures

  • Brunei’s institutional structures and procedures are currently generally adequate for an appropriate response should a TF case be identified, be it domestic or transnational in nature.

Regulatory Frameworks

  • Brunei’s legal and operational frameworks are generally sound to implement TF TFS (Transaction Monitoring Systems).
  • Authorities have issued guidance, conducted outreach to Reporting Entities (REs), and included TF TFS implementation in their risk-based supervision of REs.

Non-Profit Organizations (NPOs)

  • Brunei has assessed its risk and implemented a generally sound regulatory framework to combat the misuse of the NPO sector, particularly those that may be more vulnerable to misuse for TF.

Preventive Measures

  • Some of the core elements of preventive measures are in place for Financial Institutions (FI)/Designated Non-Financial Businesses and Professions (DNFBP), but there are remaining gaps with the regulatory framework for preventive measures.
  • No comprehensive framework for including Virtual Asset Service Providers (VASPs) in the regulatory framework.

Conclusion

The report highlights that while Brunei has made progress in implementing AML/CFT measures, there are still areas for improvement, particularly in the detection of cash smuggling, the implementation of a risk-based approach for DNFBPs, and the inclusion of VASPs in the regulatory framework.